Bill Gates made some bold predictions for the internet 20 years ago — here's what he got right

On January 3, 1996, Microsoft CEO Bill Gates wrote an essay titled "Content is King" in which he made a number of bold predictions for what the internet would look like in the future.

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At the time, only about 1% of the world was online, connection speeds were painfully slow, and there were relatively few websites to choose from.

The big modern web staples like YouTube and Facebook didn't exist, and media organizations (like this one) built to serve only digital consumers were unheard of.

Bill Gates
Vincent Kessler/Reuters

Still, the man who helped lead the personal-computer revolution could see something bigger on the horizon. In his essay, he predicted everything from the death of print media to the rise in user-generated content sites like Reddit.

And he was right. Here's a look at what Gates predicted:

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Content created for the internet would be just as big a moneymaker as TV.

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An employee arranges discarded televisions at a newly opened electronic-waste-recycling factory in Wuhan, Hubei province, China, March 29, 2011.
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"Content is where I expect much of the real money will be made on the Internet, just as it was in broadcasting," wrote Gates in the opening to his essay.

At the time he wrote it, the internet had very little multimedia content, especially since connections were very slow. It was also not worth spending any money to advertise on the net, since only about 10 million people were online.

But Gates predicted that over time more — and much better — content would be delivered, many more people would want to see it, and it would make a lot of money through digital advertising.

Is the internet as big a moneymaker as TV? Not yet, but advertising dollars are increasingly shifting to digital.

Ad-spending on television will be about 38% of the market in 2016 — much of that money continues to shift online — and digital will overtake TV by the end of the 2017, according to The New York Times.

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A big part of the internet would be user-generated content sites like YouTube and Reddit.

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"One of the exciting things about the Internet is that anyone with a PC and a modem can publish whatever content they can create. In a sense, the internet is the multimedia equivalent of the photocopier. It allows material to be duplicated at low cost, no matter the size of the audience."

Gates didn't use the term "user-generated content" here, but that's pretty much what he described. Back then, a select few companies and institutions created most of what users saw. The average Joe who wanted to elevate his voice in 1996 wrote letters to the editor of the local paper.

But the nascent internet offered a world of democratization, Gates realized, that allowed anyone with a modem to create new and exciting things.

From watching viral hits like "Charlie bit my finger" to the internet being where one of the world's biggest pop stars was found, we can definitely say this prediction is spot on.

In 2016, a big chunk of the internet is built by the very people who also consume it, from Reddit, Instagram, and Facebook to the various blogging platforms that give anyone a voice if they have something to say.

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The internet would give small companies a level playing field against much larger competitors.

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"But the broad opportunities for most companies involve supplying information or entertainment. No company is too small to participate."

With just a handful of companies having websites in 1996, it was easy to see a world in which bigger corporations would drown out the little startups. Well, that didn't happen at all.

Instead — much like allowing for user-generated content — the internet gave small companies the ability to get their name out there by creating cool content, often without spending a dime in advertising. 

Think of Dollar Shave Club's viral hit video that got 12,000 people to sign up for their service in 48 hours. Or the once one-man startup website called ViralNova that was acquired for $100 million in 2015.

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Gates foresaw the death of print media.

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"A question on many minds is how often the same company that serves an interest group in print will succeed in serving it online. Even the very future of certain printed magazines is called into question by the internet."

Just about every major news organization made its way online at some point, but many of the legacy outlets simply moved their print version to digital and did not work to innovate, an action Gates said would prove unsuccessful.

Turns out, he was right.

While there are still physical magazines and newspapers in existence, print advertising revenue in 2014 declined to its lowest point since 1950 — and it keeps going down.

Meanwhile, digital-first publications — such as BuzzFeed, Business Insider, and Vice— continue to be successful.

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News usually meant for a local audience would go global.

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Women shout slogans against the government and members of the Muslim Brotherhood and Salafists during a protest in Cairo, November 13, 2013.
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“Although the gold rush atmosphere today is primarily confined to the United States, I expect it to sweep the world as communications costs come down and a critical mass of localized content becomes available in different countries.”

The decline in print didn't mean less information. Quite the contrary.

As Gates predicted, the cost to access the internet would go down considerably, and now 40% of the world is connected. That number was barely north of 1% in 1996.

With many more people online with incredible access to information around the globe, local news stories in recent years often have had global reach. "Every journalist on earth can now reach nearly every human on earth — directly and instantly," Business Insider's Henry Blodget wrote in 2013.

There are many examples, but one could look to the 2014 protests in Ferguson, Missouri, that were supported by Palestinians a world away through social media. Or the Snowden leaks on NSA spying that rocked the world since they were first published online in 2013.

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He also predicted technology for "paywalls" to help sites monetize would begin to appear within a year.

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"But within a year the mechanisms will be in place that allow content providers to charge just a cent or a few cents for information. If you decide to visit a page that costs a nickel, you won't be writing a check or getting a bill in the mail for a nickel. You'll just click on what you want, knowing you'll be charged a nickel on an aggregated basis."

Websites charging for content is still a hotly contested topic, but in 1996 the technology for websites to take online payments was brand new. And the idea that a site could charge a few cents for content — crazy talk.

Gates fudged it a little on this one: It was Microsoft itself that led the way, launching Slate.com in June 1996 with a $19.95 annual subscription fee. Though Slate dropped its fee a year later, The Wall Street Journal added an annual $50 paywall in January 1997 that continues to this day.

"It's tricky, though, because as soon as an electronic community charges a subscription, the number of people who visit the site drops dramatically, reducing the value proposition to advertisers," Gates wrote.

Gates was certainly right about this publishing balancing act, but plenty have figured out how to implement paywalls that work.

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